This paper uses unique administrative data and a quasi-field experiment of exogenous al-location of refugees to estimate the effect of access to financially literate neighbors on two important aspects of financial behavior: saving for retirement through private accounts, and participation in stockholding. As we can track refugee households over twenty years, we can estimate the effects of the exogenous component of exposure to knowledgeable initial neighbors (over an average length of stay of 5.4 years) as it influences financial behavior ten to twenty years later. The nature of the experiment allows us to address thorny causality
42Following Calvet et al, we only consider those households with direct stock investments, and this is what reduces the number of observations in these tests.
issues related to endogenous choice of neighborhood.
We find evidence of statistically and economically significant effects of the share of ini-tial neighbors with business or economics education at college level. Benchmark estimation controls for observed refugee characteristics, unobserved features of their broader location (parish), economic conditions in their immediate neighborhood (electoral district), macroe-conomic and institutional factors, as well as unobserved cultural and other factors related to the country of origin.
We consider a number of alternative explanations. Could our results be due to simul-taneous exposure of refugees and neighbors to environmental characteristics favoring asset market participation? We address this issue of correlated effects by controlling for rele-vant economic conditions in the electoral district, as well as for unobserved factors in the broader parish. Could they represent a mere imitation effect? We show that the share of participating neighbors has smaller effects than that of knowledgeable neighbors, and that the latter have pronounced effects even when not participating. Could the effect be due to knowledgeable neighbors improving labor market prospects for refugees, who then choose to participate in asset markets because of their better standing? We do not find evi-dence of significant effects of initial knowledgeable neighbors on labor market outcomes of refugees. Could the effect arise because knowledgeable neighbors encourage refugees to get additional years of education or to be more likely to have business or economics education when we start to observe their financial behavior? We do not find evidence of either type of influence. Could knowledgeable initial neighbors be encouraging refugees to move to areas more conducive to asset participation? We do not find evidence of a significant effect on the probability that refugees will have moved by the start of the observation period for financial behavior.
We next explore the nature of the process of transmission from knowledgeable initial neighbors to the refugee households. Our approach is to vary factors influencing the knowl-edge of initial neighbors, the ability of refugees to interpret information, and the likelihood
of interactions between them. We find that content rather than the level of neighbor ed-ucation matters. Financial literacy externalities are operative only for the subsample of refugee household heads with at least a high school degree. We confirm that these results are not plausibly due to sorting of more educated refugees to areas with greater financial literacy nor to the choice of financial literacy concept. Then, we vary the likelihood of inter-actions between neigbhors and refugees. Effects are operative in areas where Swedes are more positively predisposed to immigrants, where there is a critical mass of knowledgeable neighbors, and for refugees who initially had children, and thus more impetus to interact.
All in all, our findings provide considerable evidence of influences from financially knowl-edgeable neighbors on the financial behavior of households that were placed next to them, and support for a mechanism that involves transmission of knowledge rather than imi-tation. Yet, our results have nuanced implications for the spread of financial knowledge.
Financial literacy externalities are operative when both sides have the ability to process content, and are willing and able to interact in this dimension. The spread of financial knowledge is unlikely to be automatic or homogeneous, and is likely to be most limited for people with low education and limited opportunities to interact with knowledgeable peers.
Campaigns to spread financial knowledge need to focus not only on generating content, but also on its distribution where it is needed most.
Finally, the focus on refugees generates some implications for the ongoing refugee crisis.
Our results highlight the importance for medium and longer-term refugee behavior of being placed where they can benefit from the knowledge and (financial) literacy of others. The finding that it is the more educated and financially confident refugees that are likely to benefit from financial literacy externalities seems promising, as such refugees are typically more welcome to more educated communities.
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TableI:SummaryStatistics FullSampleMedium-TermLonger-Term ObsMeanStd.Dev.ObsMeanStd.Dev.ObsMeanStd.Dev. PanelA:DependentVariables SavingforRetirement36,5130.260.4420,3030.230.4216,2100.300.46 Stockholding36,5130.370.4820,3030.370.4816,2100.360.48 PanelB:FinancialLiteracyExternalities(atinitialPlacement) Shareofneighborswitheconomics/businesseducation36,5130.020.0320,3030.020.0316,2100.020.03 Shareofneighborswithquantitativeeducation36,5130.050.0520,3030.050.0516,2100.050.05 Shareofneighborswhosaveforretirement36,5130.190.1020,3030.190.1016,2100.190.10 Shareofneighborswithstockholding36,5130.1130.08620,3030.1130.08620,3030.1130.086 Shareofneighborswithstockholdingbutnoeconomics/businesseducation36,5130.110.0820,3030.110.0820,3030.110.08 Shareofneighborswitheconomics/businesseducationbutnostockholdings36,5130.0150.0220,3030.0150.0220,3030.0150.02 Shareofneighborswitheconomics/businesseducationandstockholdings36,5130.0080.0220,3030.0080.0220,3030.0080.02 PanelC:HouseholdControls DisposableIncome(IHS)36,51312.990.5720,30312.890.5616,21013.110.57 Age30-4536,5130.510.5020,3030.580.4916,2100.410.49 Age45-6036,5130.390.4920,3030.320.4716,2100.490.50 Age60-7536,5130.070.2620,3030.050.2216,2100.090.29 Male36,5130.670.4720,3030.670.4716,2100.670.47 Unemployed/Uncategorized36,5130.320.4720,3030.350.4816,2100.290.45 Retired36,5130.090.2920,3030.090.2816,2100.100.30 Employee36,5130.560.5020,3030.520.5016,2100.600.49 Married36,5130.600.4920,3030.590.4916,2100.600.49 NumberofAdults36,5131.960.9520,3031.890.9116,2102.051.00 NumberofChildren36,5131.011.2720,3031.101.3116,2100.911.22 HighSchoolGraduate36,5130.410.4920,3030.410.4916,2100.420.49 CollegeGraduate36,5130.310.4620,3030.300.4616,2100.320.47 WorkingintheFinancialSector36,5130.0030.0520,3030.0030.0516,2100.0030.05 WorkingfortheGovernment36,5130.200.4020,3030.180.3816,2100.220.42 Note:Thistablepresentsdescriptivestatisticsforthevariablesemployedintheempiricalanalysis.Thesampleisabalancedsampleof4,061refugeeimmigrants. Themedium-termreferstothetimeperiodfrom1999to2003,andthelonger-termreferstotheperiodfrom2004to2007,respectively.Themeanandstandard deviationarecalculatedonthefullpooledsample.ThemonetaryvariablesaredefinedinSEK.Forvariabledefinitions,seeOnlineAppendixA.Source:Author computationsusingLINDAandSTATIVdatafromStatisticsSweden.
Table II: Long Shadow Effects of Having Neighbors with Economics/Business Education and College Attendance: Full Observation Period (1999-2007)
LPM Estimates Probit Estimates
Saving for Retirement Stockholding Saving for Retirement Stockholding
(i) (ii) (iii) (iv)
Initial Fin Lit Ext 0.47043* 0.93210*** 0.41074* 0.93425***
(0.2713) (0.2869) (0.2501) (0.2904)
Local Financial Development in the Elec. Dist. 0.03963 -0.05371* 0.03929 -0.05902**
(0.0288) (0.0287) (0.0279) (0.0286)
Median Taxable Wealth in the Elec. Dist. -0.00254* -0.00317** -0.00205 -0.00279*
(0.0015) (0.0015) (0.0015) (0.0015)
Median Income in the Elec. Dist. -0.05026 0.03268 -0.04233 0.03613
(0.0328) (0.0331) (0.0310) (0.0329)
Disposable Income (IHS) 0.18163*** 0.20299*** 0.18767*** 0.21638***
(0.0127) (0.0122) (0.0141) (0.0136)
Nbr of adults -0.02023*** 0.00047 -0.02053*** -0.00171
(0.0070) (0.0069) (0.0068) (0.0067)
Nbr of children -0.02179*** -0.00450 -0.01854*** -0.00100
(0.0048) (0.0050) (0.0050) (0.0050)
High school Dummy 0.04815*** 0.06376*** 0.05756*** 0.07446***
(0.0130) (0.0139) (0.0142) (0.0143)
College and more Dummy 0.09725*** 0.16857*** 0.09347*** 0.16314***
(0.0154) (0.0175) (0.0159) (0.0170)
Net wealth quartile II -0.01180 -0.02083* -0.01864* -0.02270**
(0.0104) (0.0119) (0.0105) (0.0113)
Net wealth quartile III -0.00242 -0.02214* -0.01495 -0.02140*
(0.0113) (0.0131) (0.0114) (0.0127)
Net wealth quartile IV 0.10322*** 0.13856*** 0.08009*** 0.11775***
(0.0144) (0.0139) (0.0123) (0.0123)
Financial sector Dummy 0.04519 -0.05843 0.01424 -0.05425
(0.0888) (0.0852) (0.0713) (0.0742)
Government sector Dummy 0.00519 -0.04306*** 0.00029 -0.04313***
(0.0136) (0.0144) (0.0119) (0.0134)
Observations 36,513 36,513 34,354 35,185
Clustering Electoral District Electoral District Electoral District Electoral District
Time FEs Yes Yes Yes Yes
Neighborhood FEs Parish Parish Parish Parish
Country-of-origin FEs Yes Yes Yes Yes
Arrival Year FEs Yes Yes Yes Yes
Industry Composition of the Initial Elec. Dist. Yes Yes Yes Yes
Note:This table presents coefficient estimates from a linear probability model and average marginal effects from pooled probit regressions of participation in saving for retirement through private accounts, and in stockholding (direct or indirect). In all regressions, we control for household characteristics, arrival-year fixed effects, country-of-origin fixed effects, and neighborhood fixed effects defined at the parish level. We also control for median income, median taxable wealth, median credit-to-income ratio, and fixed effects for the major industry of occupation of the residents in the initial electoral district of allocation. Standard errors are clustered at the electoral district level (1,428 cells) and reported in parentheses. The share of financially literate neighbors refers to the initial electoral district of placement and is defined as the share of natives, as well as immigrants residing in Sweden for at least 20 years, who have business or economics education and at least some college attendance. We consider a balanced sample of 4,061 refugee immigrants and financial behavior in the period 1999-2007.
Statistical significance at the 10, 5, and 1 percent levels is indicated by *, **, and ***, respectively. Source: Author computations using LINDA and STATIV data from Statistics Sweden.
Table III: Long Shadow Effects of Having Neighbors with Economics/Business Education and College Attendance: Medium-Term versus Longer-Term
Medium-Term Longer-Term
Saving for Retirement Stockholding Saving for Retirement Stockholding
(iii) (iv) (v) (vi)
Initial Fin Lit Ext 0.51858* 0.71541** 0.43506 1.20876***
(0.2779) (0.3045) (0.3087) (0.3091)
Local Financial Development in the Elec. Dist. 0.03770 -0.05710* 0.04075 -0.05052
(0.0300) (0.0298) (0.0320) (0.0317)
Median Taxable Wealth in the Elec. Dist. -0.00245 -0.00351** -0.00259 -0.00276
(0.0015) (0.0016) (0.0018) (0.0017)
Median Income in the Elec. Dist. -0.06825** 0.03007 -0.03016 0.03759
(0.0333) (0.0340) (0.0385) (0.0369)
Disposable Income (IHS) 0.15839*** 0.21128*** 0.20692*** 0.19295***
(0.0134) (0.0147) (0.0171) (0.0146)
Nbr of adults -0.02726*** 0.00093 -0.01598* 0.00139
(0.0083) (0.0086) (0.0088) (0.0085)
Nbr of children -0.02181*** -0.01029* -0.01957*** 0.00081
(0.0051) (0.0057) (0.0061) (0.0061)
High school Dummy 0.04024*** 0.06414*** 0.05589*** 0.06144***
(0.0130) (0.0148) (0.0159) (0.0158)
College and more Dummy 0.09584*** 0.15759*** 0.09791*** 0.17699***
(0.0157) (0.0178) (0.0186) (0.0205)
Net wealth quartile II -0.01034 -0.03614*** -0.00825 -0.00718
(0.0124) (0.0139) (0.0142) (0.0147)
Net wealth quartile III -0.02323* -0.05503*** 0.01725 0.01949
(0.0136) (0.0154) (0.0149) (0.0164)
Net wealth quartile IV 0.10321*** 0.11737*** 0.10079*** 0.16950***
(0.0161) (0.0158) (0.0176) (0.0178)
Financial sector Dummy 0.04855 0.00648 0.03227 -0.13975
(0.0904) (0.0919) (0.1134) (0.0933)
Government sector Dummy 0.00579 -0.04298*** 0.00499 -0.03771**
(0.0150) (0.0160) (0.0168) (0.0172)
Observations 20,303 20,303 16,210 16,210
Clustering Electoral District Electoral District Electoral District Electoral District
Time FEs Yes Yes Yes Yes
Neighborhood FEs Parish Parish Parish Parish
Country-of-origin FEs Yes Yes Yes Yes
Arrival Year FEs Yes Yes Yes Yes
Industry Composition of the Initial Elec. Dist. Yes Yes Yes Yes
Note:This table presents coefficient estimates from linear probability models of participation in saving for retirement through private accounts, and in stockhold-ing (direct or indirect) for various sample periods: the medium term (1999-2003), and the longer term (2003-2007). In all regressions, we control for household characteristics, arrival-year fixed effects, country-of-origin fixed effects, and neighborhood fixed effects defined at the parish level. We also control for median income, median taxable wealth, median credit-to-income ratio, and fixed effects for the major industry of occupation of the residents in the initial electoral district of allocation. The standard errors that are clustered at the electoral district level (1,428 cells) are reported in parentheses. When defining the financial literacy externalities, we consider the share of neighbors (both natives and immigrants who have been in Sweden for at least 20 years) who have both business/economics education and college attendance in the initial neighborhood. The sample is a balanced sample of 4,061 refugee immigrants for the years 1999-2007. Statistical significance at the 10, 5, and 1 percent levels is indicated by *, **, and ***, respectively. Source: Author computations using LINDA and STATIV data from Statistics Sweden.
Table IV: A Pure Imitation Effect? Long Shadow Effects of Having Neighbors with Economics/Business Education and College Attendance:
Medium-Term versus Longer-Term - Breakdown of the Neighbors’ Financial Literacy
Stockholding
Panel A: Medium-Term (i) (ii) (iii) (iv) (v)
Initial Share of Stockowners -0.0746 -0.15790
(0.1131) (0.1141)
Initial Fin Lit Ext (Base) 0.82091***
(0.3070)
Initial Fin Lit Ext (Alternative I) 0.93198***
(0.3591)
Initial Fin Lit Ext (Alternative II) 0.32099
(0.4988)
Initial Fin Lit Ext (Alternative III) -0.10552
(0.1186)
Observations 20,303 20,303 20,303 20,303 20,303
Panel B: Longer-Term (i) (ii) (iii) (iv) (v)
Initial Share of Stockowners -0.03211 -0.16538
(0.1152) (0.1187)
Initial Fin Lit Ext (Base) 1.31871***
(0.3169)
Initial Fin Lit Ext (Alternative I) 1.74087***
(0.3753)
Initial Fin Lit Ext (Alternative II) 0.2449
(0.5327)
Initial Fin Lit Ext (Alternative III) -0.05158
(0.1216)
Observations 16,210 16,210 16,210 16,210 16,210
Household Controls Yes Yes Yes Yes Yes
Clustering Electoral District Electoral District Electoral District Electoral District Electoral District
Time Fixed Effects Yes Yes Yes Yes Yes
Country-of-Origin Fixed Effects Yes Yes Yes Yes Yes
Arrival-year Fixed Effects Yes Yes Yes Yes Yes
Neighborhood Fixed Effects Parish Parish Parish Parish Parish
Industry Composition of the Initial Elec. Dist. Yes Yes Yes Yes Yes
Time-varying Initial Elec. Dist. Controls Yes Yes Yes Yes Yes
Note:This table presents coefficient estimates from linear probability models of participation in stockholding (direct or indirect) for various sample periods: the medium term (1999-2003), and the longer term (2003-2007). In all regressions, we control for household characteristics, arrival-year fixed effects, country-of-origin fixed effects, and neighborhood fixed effects defined at the parish level. We also control for median income, median taxable wealth, median credit-to-income ratio, and fixed effects for the major industry of occupation of the residents in the initial electoral district of allocation. The standard errors that are clustered at the electoral district level (1,428 cells) are reported in parentheses. When defining the financial literacy externalities, we consider the share of neighbors (both natives and immigrants who have been in Sweden for at least 20 years) who have both business/economics education and college attendance in the initial neighborhood. In (ii), we use our base financial literacy measure, (iii) focuses the neighbors with business/economics education without any stock investments, (iv) considers neighbors with both business/economics education and stock ownership, and (v) considers on the neighbors with stock ownerhsip but no education education in business/economics. The sample is a balanced sample of 4,061 refugee immigrants for the years 1999-2007. Statistical significance at the 10, 5, and 1 percent levels is indicated by *, **, and ***, respectively. Source: Author computations using LINDA and STATIV data from Statistics Sweden.
TableV:APureImitationEffect?LongShadowEffectsofHavingNeighborswithEconomics/BusinessEducationandCollegeAttendance:Medium-TermversusLonger-Term- Cross-AssetEffectsconsideringtheInitialShareofStockowners SavingforRetirementStockholdingSavingforRetirementStockholdingSavingforRetirementStockholding PanelA:Medium-Term(i)(ii)(iii)(iv)(v)(vi) InitialShareofStockowners0.13172-0.074600.12651-0.08245 (0.1017)(0.1131)(0.1019)(0.1127) InitialFinLitExt(AlternativeI)0.63188*0.93198***0.62100*0.93904*** (0.3601)(0.3591)(0.3593)(0.3584) Observations20,30320,30320,30320,30320,30320,303 PanelB:Longer-Term(i)(ii)(iii)(iv)(v)(vi) InitialShareofStockowners0.12798-0.032110.12263-0.04613 (0.1249)(0.1152)(0.1256)(0.1160) InitialFinLitExt(AlternativeI)0.66295*1.74087***0.652661.74467*** (0.3985)(0.3753)(0.3991)(0.3758) Observations16,21016,21016,21016,21016,21016,210 HouseholdControlsYesYesYesYesYesYes ClusteringElectoralDistrictElectoralDistrictElectoralDistrictElectoralDistrictElectoralDistrictElectoralDistrict TimeFixedEffectsYesYesYesYesYesYes Country-of-OriginFEsYesYesYesYesYesYes Arrival-yearFEsYesYesYesYesYesYes NeighborhoodFEsParishParishParishParishParishParish IndustryCompositionoftheInitialElec.Dist.YesYesYesYesYesYes Time-varyingInitialElec.Dist.ControlsYesYesYesYesYesYes Note:Thistablepresentscoefficientestimatesfromlinearprobabilitymodelsofparticipationinsavingforretirementthroughprivateaccounts,andinstockholding(directorindirect)forvarioussampleperiods: themediumterm(1999-2003),andthelongerterm(2003-2007).Inallregressions,wecontrolforhouseholdcharacteristics,arrival-yearfixedeffects,country-of-originfixedeffects,andneighborhoodfixedeffects definedattheparishlevel.Wealsocontrolformedianincome,mediantaxablewealth,mediancredit-to-incomeratio,andfixedeffectsforthemajorindustryofoccupationoftheresidentsintheinitialelectoral districtofallocation.Standarderrorsareclusteredattheelectoraldistrictlevel(1,428cells)andreportedinparentheses.InitialFinLitExt(AlternativeI)referstotheshareoffinanciallyliterateneighborsin theinitialelectoraldistrictofplacementandisdefinedastheshareofnatives,aswellasimmigrantsresidinginSwedenforatleast20years,whohavebusinessoreconomicseducationandatleastsomecollege attendancebutnostockinvestments.Weconsiderabalancedsampleof4,061refugeeimmigrants.Statisticalsignificanceatthe10,5,and1percentlevelsisindicatedby*,**,and***,respectively.Source:Author computationsusingLINDAandSTATIVdatafromStatisticsSweden.
TableVI:APureImitationEffect?LongShadowEffectsofHavingNeighborswithEconomics/BusinessEducationandCollegeAttendance:Medium-TermversusLonger-Term- Cross-AssetEffectsconsideringtheInitialShareofRetirementSavers SavingforRetirementStockholdingSavingforRetirementStockholdingSavingforRetirementStockholding PanelA:Medium-Term(i)(ii)(iii)(iv)(v)(vi) InitialShareofRetirementSavers0.19549*0.28530**0.18747*0.27658** (0.1078)(0.1155)(0.1086)(0.1152) InitialFinLitExt(AlternativeI)0.78877**0.86576**0.76390*0.82896** (0.3905)(0.4064)(0.3901)(0.4048) Observations20,30320,30320,30320,30320,30320,303 PanelB:Longer-Term(i)(ii)(v)(vi)(iii)(iv) InitialShareofRetirementSavers0.26358**0.39585***0.25517**0.38291*** (0.1214)(0.1224)(0.1218)(0.1219) InitialFinLitExt(AlternativeI)0.82192*1.27380***0.78754*1.22263*** (0.4232)(0.4218)(0.4231)(0.4230) Observations16,21016,21016,21016,21016,21016,210 HouseholdControlsYesYesYesYesYesYes ClusteringElectoralDistrictElectoralDistrictElectoralDistrictElectoralDistrictElectoralDistrictElectoralDistrict TimeFEsYesYesYesYesYesYes Country-of-OriginFEsYesYesYesYesYesYes Arrival-yearFixedFEsYesYesYesYesYesYes NeighborhoodFixedFEsParishParishParishParishParishParish IndustryCompositionoftheInitialElec.Dist.YesYesYesYesYesYes Time-varyingInitialElec.Dist.ControlsYesYesYesYesYesYes Note:Thistablepresentscoefficientestimatesfromlinearprobabilitymodelsofparticipationinsavingforretirementthroughprivateaccounts,andinstockholding(directorindirect)forvarioussampleperiods: themediumterm(1999-2003),andthelongerterm(2003-2007).Inallregressions,wecontrolforhouseholdcharacteristics,arrival-yearfixedeffects,country-of-originfixedeffects,andneighborhoodfixedeffects definedattheparishlevel.Wealsocontrolformedianincome,mediantaxablewealth,mediancredit-to-incomeratio,andfixedeffectsforthemajorindustryofoccupationoftheresidentsintheinitialelectoral districtofallocation.Standarderrorsareclusteredattheelectoraldistrictlevel(1,428cells)andreportedinparentheses.InitialFinLitExt(AlternativeI)referstotheshareoffinanciallyliterateneighborsin theinitialelectoraldistrictofplacementandisdefinedastheshareofnatives,aswellasimmigrantsresidinginSwedenforatleast20years,whohavebusinessoreconomicseducationandatleastsomecollege attendancebutnoprivateretirementsavingplans.Weconsiderabalancedsampleof4,061refugeeimmigrants.Statisticalsignificanceatthe10,5,and1percentlevelsisindicatedby*,**,and***,respectively. Source:AuthorcomputationsusingLINDAandSTATIVdatafromStatisticsSweden.
TableVII:LongShadowEffectsofHavingNeighborswithEconomics/BusinessEducationandCollegeAttendanceonVariousOutcomes: Medium-TermandLonger-Term WorkingintheFinancialSectorLaborIncomeUnemployedMover PanelA:Medium-Term(i)(ii)(iii)(iv) InitialFinLitExt0.061390.05526-0.18489-0.35184 (0.0390)(0.4733)(0.2803)(0.2938) Observations19,34219,34217,6714,061 PanelB:Longer-Term(i)(ii)(iii)(iv) InitialFinLitExt0.09056**-0.008260.29114- (0.0432)(0.4450)(0.3436)- Observations15,69715,69714,377- HouseholdControlsYesYesYesYes ClusteringElectoralDistrictElectoralDistrictElectoralDistrictElectoralDistrict TimeFixedEffectsYesYesYesYes Country-of-OriginFixedEffectsYesYesYesYes Arrival-yearFixedEffectsYesYesYesYes NeighborhoodFixedEffectsParishParishParishParish IndustryCompositionoftheInitialElec.Dist.YesYesYesYes Time-varyingInitialElec.Dist.ControlsYesYesYesYes Note:Thistablepresentsestimatesofthedeterminantsofdifferentlabormarketoutcomesandresidentiallocationchoiceestimatedusingalinearprobabilitymodel. Inallregressions,wecontrolforhouseholdcharacteristics,arrival-yearfixedeffects,country-of-originfixedeffects,andneighborhoodfixedeffectsdefinedatthe parishlevel.Standarderrorsareclusteredattheelectoraldistrictlevel(1,428cells)andreportedinparentheses.Financialliteracyexternalitiesaredefinedin termsoftheshareofneighbors(nativesandimmigrantswhohavebeeninSwedenforatleast20years)intheelectoraldistrictofinitialplacementwhohada business/economicseducationandhadattendedcollege.Wealsocontrolformedianincome,mediantaxablewealth,mediancredit-to-incomeratio,andfixedeffects forthemajorindustryofoccupationoftheresidentsintheinitialelectoraldistrictofallocation.Earningsaredefinedasthesumoflaborincome,entrepreneurial incomeandtaxableemployment-relatedtransfers.Inspecifications(i)-(iii),weconditiononhavingpositiveearnings.Theoriginalsampleisabalancedsampleof 4,061refugeeimmigrants.PanelApresentstheresultsforeffectsonoutcomesoverthemedium-term(1999-2003),whilePanelBreportsresultsforthelonger-term (2003-2007).Statisticalsignificanceatthe10,5,and1percentlevelsareindicatedby*,**,and***,respectively.Source:AuthorcomputationsusingLINDAand STATIVdatafromStatisticsSweden.
Table VIII: A Mobility Effect: Cumulative Exposure to Having Neighbors with Economics/Business Education and College Attendance: MediumTerm versus LongerTerm -2SLS Estimates
Saving for Retirement Stockholding
Panel A: Medium-Term (i) (ii)
Cumulative Exposure to Fin Lit Neighbors 3.93492** 5.02125**
(2.0034) (2.2455)
Observations 20,268 20,268
Panel B: Longer-Term (i) (ii)
Cumulative Exposure to Fin Lit Neighbors 4.45941 11.42939***
(2.9861) (3.7700)
Industry Composition of the Initial Elec. Dist. Yes Yes
Time-varying Initial Elec. Dist. Controls Yes Yes
Note:This table presents coefficient estimates from the second stage of 2SLS regressions of participation in saving for retirement through private accounts, and in stockholding (direct or indirect) for various sample periods: the medium term (1999-2003), and the longer term (2003-2007). In all regressions, we control for household characteristics, arrival-year fixed effects, country-of-origin fixed effects, and neighborhood fixed effects defined at the parish level. We also control for median income, median taxable wealth, median credit-to-income ratio, and fixed effects for the major industry of occupation of the residents in the initial electoral district of allocation. Standard errors are clustered at the electoral district level (1,428 cells) and reported in parentheses. Cumulative Exposure to Fin Lit Neighborsrefers to the weighted share of financially literate neighbors in each electoral district by the length of time spent in that location between entry and the time of observation of financial behavior. Note that we exclude the share of financially literate neighbors in the initial electoral district and used it as an excluded instrument in the first stage regressions. We defineFin Lit Neighborsas the share of natives, as well as immigrants residing in Sweden for at least 20 years, who have business or economics and at least some college attendance. We consider a balanced sample of 4,061 refugee immigrants. Statistical significance at the 10, 5, and 1 percent levels is indicated by *, **, and ***, respectively. Source: Author computations using LINDA and STATIV data from Statistics Sweden.
Table IX: Sample Split By Education: Long Shadow Effects of Having Neighbors with Economics/Business Education and College Atten-dance: Medium-Term and Longer-Term
High school and more Less than high school
Saving for Retirement Stockholding Saving for Retirement Stockholding
Panel A: Medium-Term (i) (ii) (iii) (iv)
Initial Fin Lit Ext 0.76109** 1.10336*** 0.07489 -0.31025
(0.3476) (0.3733) (0.4967) (0.4636)
Observations 14,392 14,392 5,911 5,911
Panel B: Longer-Term (i) (ii) (iii) (iv)
Initial Fin Lit Ext 0.69484* 1.66823*** -0.49097 0.17723
(0.3912) (0.3746) (0.6391) (0.5524)
Observations 11,936 11,936 4,274 4,274
Household Controls Yes Yes Yes Yes
Clustering Electoral District Electoral District Electoral District Electoral District
Time Fixed Effects Yes Yes Yes Yes
Country-of-Origin Fixed Effects Yes Yes Yes Yes
Arrival-year Fixed Effects Yes Yes Yes Yes
Neighborhood Fixed Effects Parish Parish Parish Parish
Industry Composition of the Initial Elec. Dist. Yes Yes Yes Yes
Time-varying Initial Elec. Dist. Controls Yes Yes Yes Yes
Note:This table presents coefficient estimates from linear probability models of participation in saving for retirement through private accounts, and in stock-holding (direct or indirect) for two subsamples based on educational attainment. In all regressions, we control for household characteristics, arrival-year fixed effects, country-of-origin fixed effects, and neighborhood fixed effects defined at the parish level. We also control for median income, median taxable wealth, median credit-to-income ratio, and fixed effects for the major industry of occupation of the residents in the initial electoral district of allocation. Standard errors are clustered at the electoral district level (1,428 cells) and reported in parentheses. The share of financially literate neighbors refers to the initial electoral
Note:This table presents coefficient estimates from linear probability models of participation in saving for retirement through private accounts, and in stock-holding (direct or indirect) for two subsamples based on educational attainment. In all regressions, we control for household characteristics, arrival-year fixed effects, country-of-origin fixed effects, and neighborhood fixed effects defined at the parish level. We also control for median income, median taxable wealth, median credit-to-income ratio, and fixed effects for the major industry of occupation of the residents in the initial electoral district of allocation. Standard errors are clustered at the electoral district level (1,428 cells) and reported in parentheses. The share of financially literate neighbors refers to the initial electoral